Canada’s new anti-spam Law: too much of a good thing?

Most people would agree that unwanted commercial emails – commonly called spam – are awful. Spam wastes our time. It clogs our inboxes and can be full of scams, malware and fraudulent, false and misleading messages. So who wouldn’t have cheered when Canada finally decided to outlaw spam and related afflictions?

With the September 7 conclusion of the public comment period on the new anti-spam law, known as CASL (for Canada’s anti-spam law), Canada has taken a major step toward finalizing legislation designed to outlaw practices such as sending commercial electronic messages without recipients’ consent or using misleading information in the online promotion of products. Reason to celebrate, one would think.

But those who have studied the bill and its consequences more closely have concluded that there might not be as much to cheer about after all, with CASL potentially having a number of negative effects on the Canadian businesses and consumers it seeks to protect.

In its current guise, CASL will provide Canadians with the toughest anti-spam law in the world. Some of the restrictions that will be imposed by CASL include requirements related to messaging consents, message formalities, working with third parties, technical compliance and the updating of messaging systems.

However, while this may seem all well and good, its implementation could lead to potentially substantial costs for Canadian businesses because our anti-spam law will be much more onerous than similar legislation in any other country, including any other G20 country.

So what are the costs of CASL and the draft regulations as currently drafted? In addition to the dollar outlays that Canadian businesses will have to bear to comply with CASL, the new law will have a number of other unwelcome consequences.

These include impeding start-up businesses from launching in Canada. Start-ups do not have ready-to-use email lists and the new legislation will greatly hinder the ability to develop these from scratch or source them from a third party. Canada, which already suffers from insufficient entrepreneurial activity, should not be placing new hurdles in the way of budding entrepreneurs, but this is precisely what CASL will do.

There will also be issues for Canadian business looking to develop new Internet-based marketing models. CASL was designed to address email spam, and its requirements do not easily fit with social networks such as Twitter, referral marketing and other more modern vehicles for transmitting commercial electronic messages. Sadly, it appears CASL is already in danger of becoming antiquated thanks to social networking.

CASL will likely also discourage some server operators, including outsourcing and cloud service providers, from operating facilities in Canada. Any business that sends commercial electronic messages from a server in Canada will be caught by CASL, even where the recipient is outside the country. Accordingly, companies that wish to send messages to non-Canadians, but avoid restrictions, will want to do so from servers outside Canada. This cannot be a good thing.

CASL will deter some foreign businesses, notably social network companies, from offering their products to Canadians, as they may find it too onerous to comply with the new law. Canadian consumers will lose out while foreign competitors with less stringent anti-spam legislation will pick up the pieces.

Perhaps worst of all, it is also likely that some legitimate and even useful online communication will be prohibited due to the wide scope of the bill. This means CASL could be challenged as presenting an infringement of the protection of free expression in the Canadian Charter of Rights and Freedoms. If proven, CASL would be undermined, leading to inevitable amendments and further compliance costs for Canadian businesses.

Many of these shortcomings have been addressed in the public comments recently submitted to the Canadian Radio-television and Telecommunications Commission and Industry Canada. Unfortunately, it appears that CASL could succeed in partially stemming the deluge of spam, but at the same time create a series of much greater problems for Canadian businesses and consumers.

Check out Terrence Corcoran’s opinion article on CASL in this morning’s Financial Post: Spamaflop! Why Ottawa’s spam ban law is absurd and should be overturned. Here are a few choice quotes: “I could say that Canada’s new ...

Last week the CRTC released its first two “information bulletins” intended to help businesses in interpreting CASL and the CRTC’s regulations under CASL. While certain of the Commission’s interpretations are helpful, some are troublesome as ...

In a previous post,Evaluating the Industry Canada CASL regulations: why they are needed, I suggested that close scrutiny needs to be given to Industry Canada’s new draft Electronic Commerce Protection Regulations. CASL’s “ban all” structure ...

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